Shell is to sell more than half of its North Sea stake to private equity-backed Chrysaor for $3.8b (£3.04b).
The deal will give Shell a major boost in its drive to reduce debt following the acquisition of BG Group and will breathe new life into the ageing North Sea where production has steadily declined since the late 1990s and where oil majors such as Shell and BP have struggled to generate profits.
Chrysaor which is led by veteran North Sea executive Phil Kirk and backed by private equity funds Harbour Energy and EIG Global Energy Partners, will become the largest independent operator in the North Sea after the deal’s completion.
Phil Kirk said “This acquisition reflects Chrysaor’s and Harbour’s belief that the UK North Sea has material future potential for oil and gas production.”
The package includes Shell’s interests in Buzzard, north of Aberdeen, a relatively new field that feeds into the global Brent oil benchmark, as well as a 10 percent stake in the BP-operated Schiehallion oilfield some 110 miles (180 km) west of the Shetland Islands.
Other fields include Beryl, Bressay, Elgin-Franklin, J-Block, the Greater Armada cluster, Everest, Lomond and Erskine, Shell said.
Around 400 staff are expected to transfer to Chrysaor on completion of the deal.
Shell Chief Financial Officer Simon Henry said “This deal shows the clear momentum behind Shell’s global, value-driven $30 billion divestment program. It builds on recent upstream divestments in the Gulf of Mexico and Canada.”